entergy 2007 Proxy

1,055 views

Published on

Published in: Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,055
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

entergy 2007 Proxy

  1. 1. Entergy Corporation 639 Loyola Avenue New Orleans, LA 70113 ® Notice of Annual Meeting of Shareholders New Orleans, Louisiana March 19, 2008 To the Shareholders of ENTERGY CORPORATION: NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS Date: Friday, May 2, 2008 Time: 10:00 am Place: New Orleans Marriott at the Convention Center 859 Convention Center Boulevard New Orleans, Louisiana 70130 MATTERS TO BE VOTED ON 1. Election of directors 2. Ratification of selection of Deloitte & Touche LLP as independent registered public accountants for 2008 3. Four (4) Shareholder Proposals if properly presented at the meeting 4. Transact such other business as may properly come before the meeting. All shareholders are cordially invited to attend the meeting in person. However, to ensure that each shareholder’s vote is counted at the meeting, shareholders are requested to mark, sign, date and return the enclosed proxy card as promptly as possible in the envelope provided or vote your shares via the toll-free number or over the Internet as described in the enclosed proxy. Only shareholders of record as of the close of business on March 4, 2008 are entitled to receive notice of, to attend and to vote at the meeting. IMPORTANT NOTICE REGARADING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDERS MEETING TO BE HELD ON MAY 2, 2008 This proxy statement and our 2007 Annual Report to Shareholders are available at: http://www.entergy.com/investor_relations/2007_publications.aspx. Robert D. Sloan Executive Vice President, General Counsel & Secretary
  2. 2. TABLE OF CONTENTS NOTICE OF ANNUAL MEETING 1 INFORMATION ABOUT THE ANNUAL MEETING 3 CORPORATE GOVERNANCE 6 Board of Directors 6 Director Independence 6 Board Committees 7 Corporate Governance Principles and Practices 10 COMMUNICATION WITH THE BOARD OF DIRECTORS 12 NOMINATION OF DIRECTORS 13 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 13 COMPENSATION DISCUSSION AND ANALYSIS 14 PERSONNEL COMMITTEE REPORT 30 EXECUTIVE COMPENSATION TABLES 31 Summary Compensation 31 2007 Grants of Plan-Based Awards 33 2007 Outstanding Equity Awards at Fiscal Year End 34 2007 Option Exercises and Stock Vested 36 2007 Pension Benefits 36 2007 Non-qualified Deferred Compensation 39 Potential Payments Upon Termination or Change in Control 40 2007 NON-EMPLOYEE DIRECTOR COMPENSATION 55 PERSONNEL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION 57 TRANSACTIONS WITH RELATED PERSONS 57 58 COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS COMMON STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS 59 AUDIT COMMITTEE REPORT 60 INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS 61 MATTERS REQUIRING SHAREHOLDER ACTION 62 Item 1 - Election of Directors 62 Item 2 - Ratification of Selection of Deloitte & Touche LLP as Independent Registered Public Accountants for 66 2008 Item 3 - Shareholder Proposal Regarding Advisory Vote on Executive Compensation 66 Item 4 - Shareholder Proposal Relating to Limitations on Management Compensation 68 Item 5 - Shareholder Proposal Relating to Corporate Political Contributions 69 Item 6 - Shareholder Proposal Regarding Special Shareholder Meetings 71 OTHER INFORMATION 73 Shareholder Proposals for 2009 Meeting 73 Annual Report on Form 10-K 73 2
  3. 3. PROXY STATEMENT We are providing these proxy materials to you in connection with the solicitation of proxies by the Board of Directors of Entergy Corporation for our 2008 Annual Meeting of Shareholders and for any adjournment or postponement of the meeting (quot;Annual Meetingquot;). In this proxy statement, we refer to Entergy Corporation as quot;Entergy,quot; quot;the Company,quot; quot;we,quot; quot;ourquot; or quot;us.quot; We are holding the Annual Meeting at the New Orleans Marriott at the Convention Center, 859 Convention Center Boulevard, New Orleans, Louisiana 70130, at 10:00 a.m. We intend to mail this proxy statement and a proxy card to shareholders starting on or about March 19, 2008. INFORMATION ABOUT THE ANNUAL MEETING Who is entitled to vote at the Annual Meeting? Holders of our common stock at the close of business on March 4, 2008 can vote their shares at the Annual Meeting. On that date, we had 192,346,497 common shares outstanding and entitled to vote. Each common share is entitled to one vote on each matter properly brought before the meeting. Do I need a ticket to attend the Annual Meeting? No. If you are a shareholder of record, you need only present a form of personal identification to be admitted to the meeting. If your shares are held beneficially in the name of a bank, broker or other holder of record, you must present proof of stock ownership, such as a bank or brokerage account statement, together with a form of personal identification to be admitted to the meeting. If your shares are held in an employee savings plan, you must present your employee identification badge. What is the difference between owning shares as a shareholder of record and as a beneficial owner? You may own common shares in one of the following ways: x directly in your name as the shareholder of record; x indirectly through a broker, bank or other holder of record in quot;street name;quot; or x indirectly in one of the Company's qualified employee savings plans (quot;Savings Plansquot;). If your shares are registered directly in your name, you are the holder of record of these shares and we are sending these proxy materials directly to you. As the holder of record, you have the right to give your proxy directly to us, to give your voting instructions by telephone or by the Internet, or to vote in person at the meeting. If you hold your shares in street name, your broker, bank or other holder of record is sending these proxy materials to you. As a holder in street name, you have the right to direct your broker, bank or other holder of record how to vote by filling out a voting instruction form that accompanies your proxy materials. If your shares are held in one of the Savings Plans, see quot;How do I vote shares held under the Savings Plan?quot; below. How do I vote? Your vote is important. We encourage you to vote promptly. Internet and telephone voting is available through 11:59 p.m. Eastern Time on Tuesday, April 29, 2008 for shares held in Savings Plans and through 11:59 p.m. Eastern Time on Thursday, May 1, 2008 for all other shares. You may vote in one of the following ways: By Telephone. If you are located in the United States or Canada, you can vote your shares by calling the toll-free telephone number on your proxy card or in the instructions that accompany your proxy materials. You may vote by telephone 24 hours a day. If you vote by telephone, you do not need to return your proxy card or your voting instruction form. 3
  4. 4. By Internet. You can also vote your shares by the Internet. Your proxy card indicates the Web site you may access for Internet voting. You may vote by the Internet 24 hours a day. As with telephone voting, you will be able to confirm that the system has properly recorded your votes. If you hold your shares in street name, please follow the Internet voting instructions that accompany your proxy materials. If you vote by the Internet, you do not need to return your proxy card or your voting instruction form. By Mail. If you are a holder of record, you can vote by marking, dating, and signing your proxy card and returning it by mail in the enclosed postage-paid envelope. If you hold your shares in street name, please complete and mail the voting instruction card. At the Annual Meeting. If you hold your shares in street name, you must obtain a proxy, executed in your favor, from the holder of record if you wish to vote these shares at the meeting. All shares that have been properly voted and not revoked will be voted at the meeting. If you sign and return your proxy card without any voting instructions, your shares will be voted as the Board of Directors recommends. What if I change my mind after I vote my shares? If you are a shareholder of record, you can revoke your proxy before it is exercised by: x written notice to the Secretary of the Company; x timely delivery of a valid, later-dated proxy or a later-dated vote by telephone or on the Internet; or x voting by ballot at the Annual Meeting. If you hold your shares in street name, you may submit new voting instructions by contacting your bank, broker or other holder of record. You may also vote in person at the Annual Meeting if you obtain a legal proxy as described in the answer to the previous question. All shares that have been properly voted and not revoked will be voted at the Annual Meeting. How do I vote shares held under the Savings Plans? If you participate in one of the Company's Savings Plans, your proxy card includes the number of shares credited to your account under that plan as of the record date. To allow sufficient time for the trustee to vote, the trustee must receive your voting instructions by 11:59 p.m. Eastern Time, on Tuesday, April 29, 2008. If the trustee does not receive your instructions by that date, the trustee will vote your shares in the same proportion of votes that the trustee receives from the other participants who did vote, except as may be otherwise required by law. Is my vote confidential? We maintain the confidentiality of the votes of individual shareholders. We do not disclose these votes to any member of management, unless we must disclose them for legal reasons. However, if a shareholder writes a comment on the proxy card, we will forward the comment to management. In reviewing the comment, management may learn how the shareholder voted. In addition, the Inspectors of Election and selected employees of our independent tabulating agent may have access to individual votes in the normal course of counting and verifying the vote. 4
  5. 5. What are the voting requirements to elect directors and approve each of the proposals discussed in this Proxy Statement? Quorum. We will have a quorum and will be able to conduct the business of the Annual Meeting if the holders of a majority of the votes that shareholders are entitled to cast are present at the meeting, either in person or by proxy. Abstentions and quot;broker non-votesquot; (see below) are counted as present and entitled to vote for purposes of determining a quorum. Votes Required for Proposals. To elect directors and adopt the other proposals, the following proportion of votes is required: x Directors. In the election of directors, each director will be elected by the vote of the majority of votes cast with respect to that director nominee. A majority of votes cast means that the number of votes cast quot;FORquot; a nominee's election must exceed the number of votes cast quot;AGAINSTquot; such nominee's election. A director who fails to receive a majority FOR vote will be required to tender his or her resignation to the Board of Directors for consideration. For additional information, see the quot;Corporate Governance – Corporate Governance Principles and Practices – Majority Voting in Director Elections.quot; x Independent Registered Public Accountants. To ratify the selection of our independent registered public accountants, we must receive the affirmative vote of a majority of the votes cast. x Shareholder Proposals. To adopt the shareholder proposals, we must receive the affirmative vote of a majority of the votes cast. A vote to ABSTAIN will have the effect of a vote AGAINST the proposal. Could other matters be decided at the Annual Meeting? As of the date of this Proxy Statement, we did not know of any matters to be raised at the Annual Meeting other than those referred to in this Proxy Statement. If other matters are properly presented at the Annual Meeting for consideration, the Proxy Committee appointed by the Board of Directors (the persons named in your proxy card if you are a shareholder of record) will have the discretion to vote on those matters for you. What happens if I do not submit voting instructions to my broker? If a proposal is routine (see below), a broker or other entity holding shares for an owner in street name may vote for the proposal without receiving voting instructions from the owner. If a proposal is not routine, the broker or other entity may vote on the proposal only if the owner has provided voting instructions. A broker non-vote occurs when the broker or other entity is unable to vote on a proposal because the proposal is not routine and the owner does not provide any instructions. For purposes of our Annual Meeting, we understand that the proposals relating to the election of directors and the ratification of the selection of our independent registered public accountants will be treated as routine items, but that each of the shareholder proposals will not be deemed routine items. Who will pay for the cost of the proxy solicitation? We will pay the expenses of soliciting proxies. Our directors, officers or employees may solicit proxies for us in person, or by telephone, facsimile or electronic transmission. We have hired Morrow & Co. to help us distribute and solicit proxies. We will pay Morrow $13,000, plus expenses for these services. 5
  6. 6. CORPORATE GOVERNANCE Board of Directors As of March 19, 2008, there were 12 members of the Board of Directors: Maureen S. Bateman Alexis M. Herman James R. Nichols W. Frank Blount Donald C. Hintz William A. Percy, II Simon D. deBree J. Wayne Leonard W. J. quot;Billyquot; Tauzin Chairman and Chief Executive Officer Gary W. Edwards Stuart L. Levenick Steven V. Wilkinson Presiding Director The Board provides oversight with respect to our overall performance, strategic direction and key corporate policies. It approves major initiatives, advises on key financial and business objectives, and monitors progress with respect to these matters. Members of the Board are kept informed of our business by various reports and documents provided to them on a regular basis, including operating and financial reports made at Board and Committee meetings by the Chairman and Chief Executive Officer and other officers. The Board has six standing committees: Audit, Corporate Governance, Personnel, Finance, Nuclear and Executive. The charters of the Audit, Personnel and Corporate Governance Committees are available on the Company's Investor Relations website at http://www.entergy.com/investor_relations/corporate_governance.aspx and in print to any shareholder who requests them from the Secretary of the Company. The Board met 15 times in 2007. Each incumbent, non-employee member of the Board attended at least 75% of the total number of meetings of the Board and the committees on which he or she served. We encourage, but do not require, our Board members to attend annual meetings of shareholders. All of our Board members attended our 2007 Annual Meeting of Shareholders. Director Independence A director is independent if the Board affirmatively determines that he or she has no material relationship with the Company and otherwise satisfies the independence requirements of the New York Stock Exchange (quot;NYSEquot;). A director is quot;independentquot; under the NYSE listing standards if the Board affirmatively determines that the director has no material relationship with us directly or as a partner, shareholder or officer of an organization that has a relationship with us. According to the independence standards established under the NYSE listing standards, a director is not independent if: x The director is, or has been within the last three years, an employee of the Company, or an immediate family member is, or has been within the last three years, an executive officer of the Company. x The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $100,000 in direct compensation from us, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). x The director or an immediate family member is a current partner of a firm that is our internal or external auditor, the director is a current employee of such a firm, the director has an immediate family member who is a current employee of such a firm and who participates in the firm's audit, assurance or tax compliance (but not tax planning) practice, or the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such firm and personally worked on our audit within that time. 6
  7. 7. x The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of our present executive officers at the same time serves or served on that company's compensation committee. x The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, us for property or services in an amount which, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of such other company's consolidated gross revenues. The Board of Directors has reviewed each of its non-employee members to determine compliance with the independence standards established under the NYSE listing standards. The Board noted that Mr. Hintz, a retired executive officer of the Company, had not served as an executive officer of the Company within the last three years. In addition, the Board noted that Mr. Hintz had received no payments from the Company other than director and committee fees and pension or other forms of deferred compensation for prior service. The Board further noted that a consulting agreement entered into by Mr. Hintz at the time of his retirement was no longer in effect. Based on the foregoing, the Board affirmatively determined that each of the following non-employee directors is independent within the meaning of the rules of the NYSE: Messrs. Blount, deBree, Edwards, Hintz, Levenick, Nichols, Percy, Tauzin and Wilkinson and Ms. Bateman and Ms. Herman. Board Committees Audit Committee. The Board has established an audit committee for the purpose of overseeing our accounting and financial reporting processes and the audits of our financial statements. In addition, the Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to, among other things: x our compliance with legal and regulatory requirements, including our disclosure controls and procedures; x the independent registered public accounting firm's qualifications and independence; and x the performance of our internal audit function and independent registered public accounting firm. The Board has adopted an Audit Committee Charter, a copy of which is available at http://www.entergy.com/investor_relations/corporate_governance.aspx and in print to any shareholder who requests it from the Secretary of the Company. For information about the Audit Committee's policy regarding independent auditor service, see quot;Entergy Audit Committee Guidelines for Pre-Approval of Independent Auditor Servicesquot; on page 61 of this Proxy Statement. The Audit Committee consists of four directors, each of whom the Board has determined has no material relationship with us and is otherwise independent under the rules of the NYSE. In addition, all Audit Committee members must meet the heightened standards for independence for audit committee members imposed by the Securities and Exchange Commission (quot;SECquot;) and the NYSE. Under those heightened standards, a director may not serve on the Audit Committee if the director (i) has received any consulting, advisory, or other compensatory fees from us (other than in his or her capacity as a director) or (ii) is our affiliate or the affiliate of any of our subsidiaries. Each member of our Audit Committee satisfies this heightened standard. No director may serve as a member of the Audit Committee if that director serves on the audit committees of more than two other public companies unless the Board determines that such simultaneous service would not impair the ability of that director to effectively serve on the Audit Committee. All Audit Committee members must be financially literate, and at least one member must have accounting or related financial management expertise. 7
  8. 8. The members of the Audit Committee are: Steven V. Wilkinson (Chair) Stuart L. Levenick Simon D. deBree James R. Nichols The Board has determined that Mr. Wilkinson, the Chair of the Audit Committee, is an audit committee financial expert, as such term is defined by the rules of the SEC. During 2007, the Audit Committee met 12 times. Corporate Governance Committee. The Board has established the Corporate Governance Committee, which is responsible, among other things, for: x developing policies and practices relating to corporate governance and reviewing compliance with the Company's Corporate Governance Guidelines; x recommending the director nominees for approval by the Board and the shareholders; and x establishing and implementing self-evaluation procedures for the Board and its committees. The Board has adopted a Corporate Governance Committee Charter, a copy of which is available at http://www.entergy.com/investor_relations/corporate_governance.aspx and in print to any shareholder who requests it from the Secretary of the Company. The Corporate Governance Committee consists of four directors, each of whom the Board has determined has no material relationship with us and is otherwise independent under the rules of the NYSE. The members of the Corporate Governance Committee are: Alexis M. Herman (Chair) William A. Percy, II Gary W. Edwards W. J. quot;Billyquot; Tauzin During 2007, the Corporate Governance Committee met 6 times. Personnel Committee. The Board has established a Personnel Committee which is responsible for, among other things: x reviewing and approving compensation policies and programs for our executive officers, including any employment agreement with an executive officer; x evaluating the performance of our Chairman and Chief Executive Officer; and x reporting, at least annually, to the Board on succession planning, including succession planning for the Chief Executive Officer. The Personnel Committee's charter is posted at http://www.entergy.com/investor_relations/ corporate_governance.aspx and in print to any shareholder who requests it from the Secretary of the Company. The Personnel Committee consists of five directors, each of whom the Board has determined has no material relationship with us and is otherwise independent under the rules of the NYSE. The members of the Personnel Committee are: Maureen S. Bateman (Chair) Alexis M. Herman W. Frank Blount W.J. quot;Billyquot; Tauzin Gary W. Edwards 8
  9. 9. During 2007, the Personnel Committee met 7 times. In addition, the Personnel Committee met jointly with the Finance Committee once in 2007. The role of our CEO in determining or recommending the amount or form of executive compensation is discussed in “Compensation, Discussion and Analysis” on page 29 of this proxy statement. The Personnel Committee Report is set forth on page 30 of this proxy statement, immediately following the quot;Compensation Discussion & Analysisquot; section. The Personnel Committee has adopted a policy delegating its equity grant authority and a policy on retention of independent compensation consultants. Each of these policies is discussed in the quot;Compensation Discussion & Analysisquot; section of this proxy statement. Finance Committee. The Board has established the Finance Committee, which is responsible, among other things for: x reviewing and making recommendations to the Board regarding our financial policies, strategies, and decisions; x reviewing our investing activities; and x reviewing and making recommendations to the Board with respect to significant investments. The Finance Committee consists of five directors. The members of the Finance Committee are: Simon D. deBree (Chair) Stuart L. Levenick Maureen S. Bateman James R. Nichols Donald C. Hintz During 2007, the Finance Committee met 9 times. In addition, the Finance Committee met jointly with the Personnel Committee once during 2007. Nuclear Committee. The Board has established the Nuclear Committee, which is responsible, among other things, for: x providing non-management oversight and review of all the Company's nuclear generating plants; x focusing on safety, operating performance, operating costs, staffing and training; and x consulting with management concerning internal and external nuclear-related issues. The Nuclear Committee consists of four directors. The members of the Nuclear Committee are: Donald C. Hintz (Chair) William A. Percy, II W. Frank Blount Steven V. Wilkinson During 2007, the Nuclear Committee met 8 times. Executive Committee. The Board has established the Executive Committee, which is authorized to act for the Board on matters other than those matters specifically reserved by Delaware law to the entire Board. The members of the Executive Committee are: J. Wayne Leonard (Chair) Gary W. Edwards Simon D. deBree Donald C. Hintz During 2007, the Executive Committee did not meet. 9
  10. 10. Corporate Governance Principles and Practices Corporate Charters and Ethics Policies. Our Corporate Governance Guidelines, certificate of incorporation, bylaws and Board committee charters form the framework of our corporate governance. In addition, we have adopted a Code of Business Conduct and Ethics for the members of our Board of Directors, a Code of Business Conduct and Ethics for our employees and a Code of Entegrity, which sets forth the ethical responsibilities of our employees, officers and representatives. Our Corporate Governance Guidelines, the charters of our Audit, Personnel and Corporate Governance Committees, and our ethics guidelines, including any amendments, are available at http://www.entergy.com/investor_relations/corporate_governance.aspx and in print to any shareholder who requests it from the Secretary of the Company. Board Independence. Our Corporate Governance Guidelines state that the Board of Directors should be comprised of a substantial majority of non-employee directors and a majority of independent directors. Under our Corporate Governance Guidelines, no director qualifies as independent unless the Board of Directors affirmatively determines that the director has no material relationship with the Company (directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). In addition, the Board of Directors applies the independence tests specified in the rules of the NYSE. For additional information, see quot;Corporate Governance – Director Independence.quot; Executive Meetings of the Board of Directors. The non-employee directors meet in executive session (separate from management) at least four times a year. In addition, if non-employee directors include directors who are not independent, the independent directors meet in executive session at least once a year. The non-employee directors met in executive session 7 times in 2007. Presiding Director. The Board of Directors appoints the Chairman of the Board and the Chief Executive Officer. When the roles of Chairman of the Board and the Chief Executive Officer are combined, the Board of Directors appoints from among its independent members a Presiding Director. The Presiding Director is recommended by the Corporate Governance Committee and appointed by a majority of the independent members of the Board of Directors. The Presiding Director, subject to his or her annual election to the Board of Directors, serves for a term of three years. The Company's Presiding Director currently is Gary W. Edwards. Under our Corporate Governance Guidelines, the Presiding Director has the following responsibilities: x Presides at executive sessions of independent directors as well as all meetings of the Board at which the Chairman of the Board and Chief Executive Officer is not present; x Serves as liaison with Chairman of the Board and Chief Executive Officer when requested by the independent directors; x Reviews and advises on Board meeting agendas (and consults with the Chairman of the Board and Chief Executive Officer on the preparation of agendas); x May call meetings of the independent directors; x Provides feedback from the Board to the Chairman of the Board and the Chief Executive Officer following each executive session of independent directors and, together with the Chair of the Personnel Committee, provides the Chairman of the Board and Chief Executive Officer with an annual performance review; and x Such additional responsibilities as the Board of Directors may assign, and the Presiding Director may accept. Board Evaluation Process. The Board conducts a self-evaluation process at least annually to determine whether it and its committees are functioning effectively. Mandatory Resignation upon Change in Professional Circumstances. Under our Corporate Governance Guidelines, non-employee directors should submit their resignations when either their employment or the major 10
  11. 11. responsibilities they held when they joined the Board changes. Based on the recommendation of the Corporate Governance Committee, the Board reviews the appropriateness of the director's nomination for re-election to the Board under these circumstances. Mandatory Director Retirement and Term Limits. Under our Corporate Governance Guidelines, directors may not be nominated by the Board for re-election after they have reached the age of 72, unless specifically recommended to serve beyond the age of 72 by the Corporate Governance Committee and approved by the Board of Directors. The Company does not have term limits for its directors. Instead, our Board addresses the suitability for continued service as a director upon the expiration of each director's term. Succession Planning for the Chief Executive Officer. The Personnel Committee reports on at least an annual basis to the Board on succession planning. Our succession planning is intended to include appropriate contingencies for the unexpected retirement or incapacity of the Chief Executive Officer. Director Orientation and Continuing Education. The Corporate Governance Committee specifies the desired components of new director orientation and makes periodic recommendations concerning the continuing education of all Board members. Director Stock Ownership Guidelines. The Board of Directors believes that the alignment of directors' interests with those of shareholders is strengthened when Board members are also shareholders. The Board of Directors therefore requires that all non-employee directors, within three years of being first elected, own shares or units of Entergy common stock having a market value of at least four times their annual cash retainer. A review of non- employee director stock ownership was conducted at the December 2007 Corporate Governance Committee meeting and all of our non-employee directors satisfied these ownership guidelines. Executive Officer Stock Retention Policy Following Exercise of Options. The Personnel Committee has adopted stock retention guidelines applicable to the Company's executive officers. The guidelines provide, among other things, that, if an executive officer exercises any stock option granted on or after January 1, 2003, the officer must retain at least 75 percent of the after tax net profit in Entergy common stock until the earlier of 60 months from the date at which the option is exercised or the termination of full-time employment with the Company. Majority Voting in Director Elections. In January 2007, our Board of Directors approved an amendment to the Company's Bylaws to require each director to be elected by a majority of the votes cast with respect to such director in uncontested elections (the number of shares voted quot;forquot; a director must exceed the number of votes cast quot;againstquot; that director). In a contested election (a situation in which the number of nominees exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election of directors. Review of Transactions with Related Persons. Our Board of Directors has adopted policies and procedures for the review, approval or ratification of any transaction involving an amount in excess of $120,000 in which any director or executive officer of the Company, any nominee for director, or any immediate family member of the foregoing had a material interest as contemplated by Item 404(a) of Regulation S-K (quot;Related Party Transactionsquot;). Under these policies and procedures, the Corporate Governance Committee, or a subcommittee of the Board of Directors comprised of independent directors, reviews the transaction and either approves or rejects the transaction after taking into account the following factors: x Whether the proposed transaction is on terms that are at least as favorable to the Company as those achievable with an unaffiliated third party; x Size of the transaction and amount of consideration; x Nature of the interest; x Whether the transaction involves a conflict of interest; 11
  12. 12. x Whether the transaction involves services available from unaffiliated third parties; and x Any other factors that the Corporate Governance Committee or subcommittee deems relevant. The policy does not apply to (a) compensation and Related Party Transactions involving a director or an executive officer solely resulting from that person's service as a director or employment with the Company so long as the compensation is reported in the Company's filings with the SEC, (b) transactions involving the rendering of services as a public utility at rates or charges fixed in conformity with law or governmental authority or (c) any other categories of transactions currently or in the future excluded from the reporting requirements of Item 404(a) of Regulation S-K. Shareholder Approval of Future Severance Agreements. In March 2004, the Board adopted a policy that precludes the Company and its subsidiaries from entering into employment or severance agreements that provide severance benefits to executive officers in excess of 2.99 times the sum of the annual base salary and bonus unless the agreement has been approved by the Company's shareholders. COMMUNICATION WITH THE BOARD OF DIRECTORS We believe that communication between the Board of Directors and its shareholders and other interested parties is an important part of the corporate governance process. The independent members of the Board of Directors of the Company have adopted the following communication policy: Shareholders and other interested parties may communicate with the Board or individual directors, including non- management directors, by writing to them in care of the Presiding Director at the address set forth below: c/o Presiding Director Entergy Corporation 639 Loyola Avenue P.O. Box 61000 New Orleans, LA 70161 E-mail: etrbod@entergy.com The following types of communications will not be forwarded to the directors: x Spam x Junk mail and mass mailings; x Service complaints; x Service inquiries; x New service suggestions; x Resumes and other forms of job inquiries; x Surveys; x Business solicitations and advertisements; or x Requests for donations and sponsorships. Except as provided above, the Corporate Secretary forwards communications sent in accordance with the above instructions to the Board or to any individual director(s) to whom the communication is directed unless the communication is threatening, illegal or similarly inappropriate. The Corporate Secretary periodically advises the Presiding Director of significant communications received from shareholders and other interested parties. 12
  13. 13. NOMINATION OF DIRECTORS The Corporate Governance Committee has not established any specific, minimum qualifications that must be met by director candidates or identified any specific qualities or skills that it believes our directors must possess. The Corporate Governance Committee takes a wide range of factors into account in evaluating the suitability of director candidates, including general understanding of marketing, finance and other disciplines relevant to the success of a publicly-traded company in today's business environment, understanding of our business, education and professional background, and reputation for integrity. The Corporate Governance Committee does not have any single method for identifying director candidates but will consider candidates suggested by a wide range of sources. The Corporate Governance Committee will consider director candidates recommended by our shareholders. Shareholders wishing to recommend a candidate to the Corporate Governance Committee should do so by submitting the recommendation in writing to our Secretary at 639 Loyola Avenue, P.O. Box 61000, New Orleans, LA 70161, and they will be forwarded to the Corporate Governance Committee members for their consideration. Any recommendation should include: x the number of shares of the Company held by the shareholder; x the name and address of the candidate; x a brief biographical description, including his or her occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements set forth above; and x the candidate's signed consent to serve as a director if elected and to be named in the Proxy Statement. Once the Corporate Governance Committee receives the recommendation, it may request additional information from the candidate about the candidate's independence, qualifications and other information that would assist the Corporate Governance Committee in evaluating the candidate, as well as certain information that must be disclosed about the candidate in our Proxy Statement, if nominated. The Corporate Governance Committee will apply the same standards in considering director candidates recommended by shareholders as it applies to other candidates. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and any persons owning more than ten percent of Entergy's common stock, to file with the SEC and NYSE initial reports of beneficial ownership and certain changes in that beneficial ownership, with respect to the equity securities of Entergy. We prepare and file these reports on behalf of our directors and executive officers. Based solely on a review of these forms filed with the SEC and written representations from the reporting persons that no Form 5 was required, the Company believes all reports were timely filed. 13
  14. 14. COMPENSATION DISCUSSION AND ANALYSIS Introduction In this section, we discuss and analyze the salaries and other compensation elements paid in 2007 to our Chief Executive Officer, our Chief Financial Officer, and our three other most highly compensated executive officers (collectively, the “Named Executive Officers”). Compensation data for each Named Executive Officer appear in the summary compensation and other tables appearing immediately after this section. Executive Summary We have designed the compensation program for our Named Executive Officers to attract, retain, motivate and reward executives who can contribute to our long-term success and thereby build value for our shareholders. Our executive compensation package is comprised of a combination of short-term and long-term compensation elements. Short-term compensation includes base pay and annual cash bonus awards. Long-term compensation includes stock options and performance units. Our executive compensation program is approved by our Personnel Committee, which is comprised entirely of independent board members. The following table summarizes the principal factors that we take into account in deciding the amount of each compensation element we pay or award to our executives: Key Compensation Components Factors (where reported in summary compensation table) - Base Salary Company, business unit and individual performance - (salary, column c) Market data - Internal pay equity - The Committee's assessment of other elements of compensation - Non-Equity Incentive Plan Compensation Compensation practices at our peer group companies and the general market (Cash Bonus) for companies our size - (non-equity plan compensation, column g) Desire to ensure that a substantial portion of total compensation is performance-based - The Committee's assessment of other elements of compensation - Performance Units Compensation practices at our peer group companies and in broader group of (stock awards, column e) utility companies - Target long-term compensation values in the market for similar jobs - The desire to ensure that a substantial portion of total compensation is performance-based - The Committee's assessment of other elements of compensation - Stock Options Individual performance - (options, column f) Prevailing market practice - Targeted long-term value created by the use of stock options - Potential dilutive effect of stock option grants - The Committee's assessment of other elements of compensation . We make compensation decisions for each executive officer after taking into account all elements of the officer’s compensation. In making compensation decisions, we apply the same compensation policies to all of our executive 14
  15. 15. officers; however, the application of these policies results in different compensation amounts to individual executive officers because of: (i) differences in roles and responsibilities; (ii) differences in market-based compensation levels for specific officer positions; (iii) our assessment of individual performance; and (iv) variations in business unit performance. Objectives of our Executive Compensation Program The greatest part of the compensation of our Named Executive Officers should be in the form of quot;at riskquot; performance-based compensation. We have designed our compensation programs to ensure that a significant percentage of the total compensation of our Named Executive Officers is contingent on achievement of performance goals that drive total shareholder return and result in increases in our common stock price. For example, each of our annual cash incentive and our long-term performance unit programs is designed to pay out only if we achieve pre- established performance goals. Assuming achievement of these performance goals at target level, approximately 80% of the annual target total compensation (excluding non-qualified supplemental retirement income) of our Chief Executive Officer is represented by performance-based compensation and the remaining 20% is represented by base salary. For the other Named Executive Officers, assuming achievement of performance goals at the target levels, approximately 65% of the annual target total compensation (excluding non-qualified supplemental retirement income) is represented by performance-based compensation and the remaining 35% by base salary. Our Chief Executive Officer’s total compensation is at greater risk than our other Named Executive Officers, reflecting both market practice and acknowledging the leadership role of the Chief Executive Officer in setting company policy and strategies. A substantial portion of our Named Executive Officers' compensation should be delivered in the form of equity awards. To align the economic interests of our Named Executive Officers with our shareholders, we believe that a substantial portion of their total compensation should be in the form of equity-based awards. Equity awards are typically granted in the form of stock options with a three-year vesting schedule and performance units with a three-year performance cycle. Stock options are generally subject only to time-based vesting. Performance units pay out only if we achieve specified performance targets. The amount of payout varies based on the level of performance achieved. Our compensation programs should enable us to attract, retain and motivate executive talent by offering compensation packages that are competitive but fair. It is in our shareholders' best interests that we attract and retain talented executives by offering compensation packages that are competitive but fair. Our Personnel Committee has sought to develop compensation programs that deliver total target compensation in aggregate at approximately the 50th percentile of the market. Our Starting Point To develop a competitive compensation program, the Personnel Committee on an annual basis reviews base salary and other compensation data from two sources: Survey Data: The Committee uses published and private compensation survey data to develop marketplace compensation levels for our executive officers. The data, which is compiled by the Committee’s independent compensation consultant, compares the current compensation levels received by each of our executive officers against the compensation levels received by executives holding similar positions at companies with corporate revenues consistent with our revenues. For non-industry specific positions such as a chief financial officer, the Committee reviews data from general industry. For management positions that are industry-specific such as Group President, Utility Operations, the Committee reviews data from energy service companies. The survey data reviewed by the Committee covers approximately 300 public and private companies in general 15
  16. 16. industry and approximately 60 to 70 public and private companies in the energy services sector. In benchmarking compensation levels against the survey data, the Committee considers only the aggregated survey data. The identity of the companies comprising the survey data is not disclosed to, or considered by, the Committee in its decision-making process and, thus, is not considered material by the Committee. The Committee uses the survey data to develop compensation programs that deliver total target compensation at approximately the 50th percentile of the market. For this purpose, the Committee reviews the results of the survey data (organized in tabular format) comparing each Named Executive Officer’s compensation relative to the 25th, 50th (or median) and 75th percentile of the market. The Committee considers its objectives to have been met if our Chief Executive Officer and the executive officers who constitute what we refer to as our Office of the Chief Executive, considered as a group (9 officers) have a target compensation package that falls within the range of 90 – 110 percent of the 50th percentile benchmarked in the survey data. In 2007, the target compensation of all Named Executive Officers fell within this range. Actual compensation received by an individual officer may be above or below the 50th percentile based on an individual officer’s skills, performance and responsibilities. Proxy Analysis: As an additional point of analysis, the Committee reviews data derived from proxy statements comparing the compensation levels of our Named Executive Officers against the compensation levels of the corresponding top 5 highest paid executive officers from 18 of the companies included in the Philadelphia Utilities Index. Unlike the survey data (which is used as the primary data for purposes of benchmarking compensation), the market data from the proxy analysis are not comparable to our Named Executive Officers in terms of roles and responsibilities. Rather, the market data from the proxy analysis are compared to our executive officers based on pay rank. These companies are: x x AES Corporation Exelon Corporation x x Ameren Corporation FirstEnergy Corporation x x American Electric Power FPL Group Inc. Co. Inc. x x CenterPoint Energy Inc. Northeast Utilities x x Consolidated Edison Inc. PG&E Corporation x x Dominion Resources Inc. Progress Energy, Inc. x x DTE Energy Company Public Service Enterprise Group, Inc. x x Duke Energy Corporation Southern Company x x Edison International XCEL Energy 16
  17. 17. Elements of the Compensation Program The major components of our executive compensation program are presented below: Entergy Corporation Executive Compensation Short-Term Long-Term Benefits Compensation Compensation Non-Equity Base Salary Stock Options Performance Restricted Incentive Plan Compensation Units Units Short-Term Compensation x Base Salary Base Salary. The Personnel Committee reviews and approves the base salaries for all of our Named Executive Officers. Base salary is a component of our Named Executive Officers’ compensation package because the Committee believes it is appropriate that some portion of the compensation that is provided to these officers be provided in a form that is a fixed cash amount. Also, base salary remains the most common form of payment throughout all industries. Its use ensures a competitive compensation package to our Named Executive Officers. The Committee determines whether to award Named Executive Officers annual merit increases in base salary based on the following factors: Company, business unit and individual performance during the prior year; Market data; Internal pay equity; and The Committee's assessment of other elements of compensation provided to the Named Executive Officer. The corporate and business unit goals and objectives vary by individual officers and include, among other things, corporate and business unit financial performance, capital expenditures, cost containment, safety, reliability, customer service, business development and regulatory matters. Our use of “internal pay equity” in setting merit increases is limited to determining whether a change in an executive officer’s role and responsibilities relative to other executive officers requires an adjustment in the officer’s salary. The Committee has not established any predetermined formula against which the base salary of one Named Executive Officer is measured against another officer or employee. In 2007, after taking into account the market data and other factors described above, the Committee approved merit- based salary increases for our Named Executive Officers in amounts ranging from 3.5 to 5.0 percent. In general these merit-based increases were consistent with the merit increase percentages approved with respect to Named Executive Officers in the last two years (excluding adjustments in salaries related to market factors, promotions or other changes in job responsibilities). 17
  18. 18. The following table sets forth the 2006 base salaries for our Named Executive Officers, the 2007 percentage increase and the resulting 2007 base salary. Changes in base salaries were effective in April of each of the years shown. Named Executive 2006 Base Salary Percentage Increase 2007 Base Salary Officer J. Wayne Leonard $1,183,000 3.97% $1,230,000 Leo P. Denault $ 546,000 9.9% $ 600,000 Mark T. Savoff $ 510,000 4.0% $ 530,400 Richard J. Smith $ 543,000 14.5% $ 622,000 Gary J. Taylor $ 522,000 5.4% $ 550,000 In addition to the market-based and other factors described above, the following factors were considered by the Committee with respect to the officers identified below: x Mr. Leonard’s salary was increased due to the Personnel Committee’s assessment of, among other things, his strong performance as Chief Executive Officer, the Company’s financial and operational performance in 2006 and comparative market data on base salaries for Chief Executive Officers. x In April 2007, Mr. Smith was promoted to President and Chief Operating Officer and Mr. Taylor was promoted to Group President, Utility Operations. Both Mr. Smith and Mr. Taylor’s salaries were increased to reflect the increased responsibilities of their new positions and comparative market data for officers holding similar positions and performing similar responsibilities. x Mr. Denault’s salary was increased to reflect comparative market data for chief financial officers and in recognition of his critical role in implementing a number of the Company’s strategic and financial goals and objectives. x Non-Equity Incentive Plans (Cash Bonus) We include performance-based incentives in the Named Executive Officers’ compensation packages because it encourages our Named Executive Officers to pursue objectives consistent with the overall goals and strategic direction that the Board has set for our Company. Annual incentive plans are commonly used by companies in a variety of industry sectors to compensate their executive officers. Our Named Executive Officers participate in a performance-based cash bonus plan known as the Executive Annual Incentive Plan or Annual Incentive Plan. The plan operates on a calendar year basis. We use a performance metric known as the Entergy Achievement Multiplier to determine the payouts for each particular calendar year. The Entergy Achievement Multiplier is used to determine the percentage of target annual plan awards that will be paid each year to each Named Executive Officer. In December 2006, we selected the Entergy Achievement Multiplier for 2007 awards to be based in equal part on earnings per share and operating cash flow. The Committee selected these performance measures because: x earnings per share and operating cash flow have both a correlative and causal relationship to shareholder value performance; x earnings per share and operating cash flow targets are aligned with externally-communicated goals; and x earnings per share and operating cash flow results are readily available in earning releases and SEC filings. In addition, these measures are commonly used by other companies, including the industry peer group companies, as components of their incentive programs. For example, approximately two-thirds of the industry peer group companies use earnings per share as an incentive measure and one-third use some type of cash flow measure. The Personnel Committee evaluates the performance measures used for the Annual Incentive Plan on an annual basis. 18
  19. 19. The Committee sets minimum and maximum achievement levels under the Annual Incentive Plan at approximately 10% below and 10% above target achievement levels. Payouts for performance between minimum and target achievement levels and between target and maximum levels are calculated using straight line interpolation. In general, the Committee seeks to establish target achievement levels such that the relative difficulty of achieving the target level is consistent from year to year. Over the past five years ending in 2007, the average Entergy Achievement Multiplier, representing earnings per share and operating cash flow results, was 135% of target. This result reflects the strong performance of the Company during this period. In December 2006, the Committee set the 2007 target award for incentives to be paid in 2008 under the Annual Incentive Plan for our Chief Executive Officer at 120% of his base salary and the target awards for each other Named Executive Officer at 70% of their respective base salaries. In setting these target awards, the Personnel Committee considered several factors, including: x Analysis provided by the Committee's independent compensation consultant as to compensation practices at the industry peer group companies and the general market for companies our size; x Competitiveness of the Company's compensation plans and their ability to attract and retain top executive talent; x The individual performance of each Named Executive Officer; x Target bonus levels in the market for comparable positions; x The desire to ensure that a substantial portion of total compensation is performance-based; x The relative importance, in any given year, of the short-term performance goals established pursuant to the Annual Incentive Plan; and x The Committee's assessment of other elements of compensation provided to the Named Executive Officer. The Committee established a higher target percentage for Mr. Leonard compared to the other Named Executive Officers to reflect the following factors: Mr. Leonard’s leadership and contributions to the Company’s success as measured by, among other things, the overall performance of the Company. Market practices that compensate chief executive officers at greater potential compensation levels with more “pay at risk,” than other named executive officers. The Personnel Committee’s assessment of Mr. Leonard’s strong performance based on the Board’s annual performance evaluation, in which the Board reviews and assesses Mr. Leonard’s performance based on: leadership, strategic planning, financial results, succession planning, communications with all of our stakeholders, external relations with the communities and industries in which we operate and his relationship with the Board. The Committee based its decision on the target award of the Named Executive Officers (other than the Chief Executive Officer) on the recommendation of the Chief Executive Officer, including his assessment of each officer’s performance. For additional information regarding the role of the Chief Executive Officer in compensation decisions, see “Compensation Program Administration– Role of Chief Executive Officer.” In January 2008, the Committee determined the Entergy Achievement Multiplier to be used for purposes of determining annual bonuses for 2007. The targets established to measure management performance against as reported results were: Minimum Target Maximum Earnings Per Share ($) 4.77 5.30 5.83 Operating Cash Flow ($ billion) 2.3 2.6 2.9 After reviewing earnings per share and operating cash flow results against the performance objectives in the above table, the Personnel Committee certified the Entergy Achievement Multiplier at 123% of target. 19
  20. 20. Under the terms of the program, the Entergy Achievement Multiplier is automatically increased by 25 percent for the members of the Office of the Chief Executive, subject to the Personnel Committee’s discretion to adjust the automatic multiplier downward or eliminate it altogether. The multiplier, which we refer to as the Management Effectiveness Factor, is intended to provide the Committee, through the exercise of negative discretion, a mechanism to take into consideration specific achievement factors relating to the overall performance of the Company. In January 2008, the Committee exercised its negative discretion to eliminate the Management Effectiveness Factor, reflecting the Personnel Committee’s determination that the Entergy Achievement Multiplier, in and of itself without the Management Effectiveness Factor, was consistent with the performance levels achieved by the Company’s management. The following table shows the Annual Incentive Plan payments as a percentage of base salary for 2007 based on an Entergy Achievement Multiplier of 123%: Named Exeutive Officer Target Percentage Base Salary J. Wayne Leonard 120% 148% Leo Denault 70% 86% Mark J. Savoff 70% 86% Richard J. Smith 70% 86% Gary J. Taylor 70% 86% The amounts paid for 2007 under the Annual Incentive Plan for the Named Executive Officer are disclosed in column (g) of the Summary Compensation Table located on page 31. Nuclear Retention Plan One of our Named Executive Officers, Mr. Gary J. Taylor, our current Group President, Utility Operations, previously served as our Executive Vice President and Chief Nuclear Officer. In that capacity, he participates in a special retention plan for officers and other leaders with special expertise in the nuclear industry. We established the plan to attract and retain management talent in the nuclear power field, a field which requires unique technical and other expertise that is in great demand in the utility industry. For individuals who commenced participation prior to January 1, 2007, the plan covers a four-year period. For example, an individual who commenced participation on January 1, 2005, subject to their continued employment with a participating company, is eligible to receive a special cash bonus consisting of three payments, each consisting of an amount from 15% to 25% of such participant's then (2005) base salary at the end of 2007, 2008 and 2009. In the case of Mr. Taylor, the special cash bonus is fixed at 25% of his base salary. As a result, Mr. Taylor received a cash bonus equal to 25% of his 2005 salary (his salary at the time of his enrollment in the plan). Long-Term Compensation Our long-term equity incentive programs are intended to reward the Named Executive Officers for achievement of shareholder value creation over the long-term. In our long-term incentive programs, we primarily use a mix of performance units and stock options in order to accomplish different objectives. Performance units reward the Named Executive Officers on the basis of total shareholder return, which is a measure of stock appreciation and dividend payments relative to the industry peer group companies. Options provide a direct incentive for growing the price of our common stock. In addition, we occasionally award restricted units for retention purposes or to offset forfeited compensation in order to attract officers and managers from other companies. Each of the performance units and stock options granted to our Named Executive Officers in 2007 were awarded under our 2007 Equity Ownership and Long Term Cash Incentive Plan, which we refer to as the 2007 Equity Ownership Plan. 20
  21. 21. x Performance Unit Program We issue performance unit awards to our Named Executive Officers under our Performance Unit Program. Each Performance Unit equals the cash value of one share of our common stock at the end of the performance cycle. Each unit also earns the cash equivalent of the dividends paid during the three-year performance cycle. The Performance Unit Program is structured to reward Named Executive Officers only if performance goals set by the Personnel Committee are met. The Personnel Committee has no discretion to make awards if minimum performance goals are not achieved. The Performance Unit Program provides a minimum, target and maximum achievement level. We measure performance by assessing Entergy's total shareholder return relative to the total shareholder return of industry peer group companies. The Personnel Committee chose total shareholder return as a measure of performance because it assesses the Company's creation of shareholder value relative to other electric utilities over the performance cycle. Minimum, target and maximum performance levels are determined by reference to the quartile ranking of Entergy's total shareholder return against the total shareholder return of industry peer group companies. Prior to 2006, this peer group was the Standard & Poor’s Electric Utility Index. Beginning with the 2006-2008 performance period, we identified the Philadelphia Utility Index as the industry peer group for total shareholder return performance because the companies represented in this index more closely approximate us in terms of size and scale and because the companies comprising the Standard and Poor’s Electric Utility Index had been reduced by 50%, which resulted in a pool of companies insufficient for comparative purposes. The companies included in the Philadelphia Utility Index are provided on page 16. Subject to achievement of the Performance Unit Program performance levels, the Personnel Committee issued the following target amounts for the 2008–2010 performance cycle: 16,500 performance units for our Chief Executive Officer and 3,900 performance units for each of the other Named Executive Officers. The range of payouts under the program is shown below. Quartiles: 4 3 2 1 Performance Zero Minimum Target Maximum Levels: 25th percentile and 25th to 50th 50th to 75th 75th percentile and Total below percentiles percentiles above Shareholder Return Ranges: No Payout Interpolate between Interpolate between Maximum Payout Payouts: Minimum and Target Target and (250% of Target) (10% to 100% of Maximum (100% to Target) 250% of Target) The Personnel Committee sets payout opportunities for the Performance Unit Program each year. In determining payout opportunities, the Committee considers several factors, including: x The advice of the Committee's independent compensation consultant regarding compensation practices at the industry peer group companies; x Competitiveness of the Company's compensation plans and their ability to attract and retain top executive talent; x Target long-term compensation values in the market for similar jobs; x The desire to ensure, as described above, that a substantial portion of total compensation is performance- based; x The relative importance, in any given year, of the long-term performance goals established pursuant to the Performance Unit Program; and x The Committee's assessment of other elements of compensation provided to the Named Executive Officer. 21
  22. 22. For the 2005-2007 performance cycle, the target amounts established for the Chief Executive Officer were 34,300 performance units and for the other Named Executive Officers, the target amounts established were 6,000 performance units. Participants could earn performance units consistent with the range of payouts as described above for the 2008-2010 performance cycle. The Committee established a higher target amount for Mr. Leonard compared to the other Named Executive Officers based on the following factors: Mr. Leonard’s leadership and contributions to the Company’s success as measured by, among other things, the overall performance of the Company. Market practices that compensate chief executive officers at greater potential compensation levels with more “pay at risk,” than other named executive officers. In January 2008, the Committee assessed the Company's total shareholder return for the 2005-2007 performance period and determined the actual number of performance units to be paid to Performance Unit Program participants for the 2005-2007 performance cycle. Performance was measured in a manner similar to that described above for the 2008-2010 cycle, on the basis of relative total shareholder return. For purposes of determining the Company's relative performance for the 2005-2007 period, the Committee used the Standard and Poor’s Electric Utility Index as our peer group. Based on market data provided by our independent compensation consultant and the recommendation of management, the Committee compared the Company's total shareholder return against the total shareholder return of the companies that comprised the Standard and Poor’s Electric Utility Index at the beginning of the plan period. However because TXU was delisted during the plan period due to a private buyout and its return could not be objectively measured, TXU was excluded from the peer group. Based on a comparison of the Company’s performance relative to the Standard & Poor’s Electric Utility Index as described above, the Committee concluded that the Company had exceeded the performance targets for the 2005- 2007 performance cycle, resulting in a payment of 225% of target. Each performance unit was then automatically converted into cash at the rate of $119.52 per unit, the closing price of our common stock on the last trading day of the performance cycle (December 31, 2007), plus dividend equivalents accrued over the three-year performance cycle. See the 2007 Stock Option Exercises and Stock Vested table for the amount paid to each of the Named Executive Officers for the 2005-2007 performance unit cycle. x Stock Options The Personnel Committee considers several factors in determining the amount of stock options it will grant under our equity ownership plans to our Named Executive Officers, including: x Individual performance; x Prevailing market practice in stock option grants; x The targeted long-term value created by the use of stock options; x The number of participants eligible for stock options, and the resulting quot;burn ratequot; (i.e., the number of stock options authorized divided by the total number of shares outstanding) to assess the potential dilutive effect; and x The Committee's assessment of other elements of compensation provided to the Named Executive Officer. For stock option awards, the Committee's assessment of individual performance of each Named Executive Officer done in consultation with our Chief Executive Officer is the most important factor in determining the number of options awarded. 22
  23. 23. The following table sets forth the number of stock options granted to each Named Executive Officer in 2007. The exercise price for each option was $91.82, which was the closing fair market value of Entergy Corporation common stock on the date of grant. Named Exeutive Officer Stock Options J. Wayne Leonard 255,000 Leo Denault 60,000 Mark J. Savoff 35,000 Richard J. Smith 60,000 Gary J. Taylor 60,000 The option grants awarded to our named executive officers (other than the Chief Executive Officer) ranged in amount between 35,000 and 60,000 shares. In the case of our Chief Executive Officer, who received 255,000 stock options, the Committee took special note of Mr. Leonard’s performance as the Company’s Chief Executive Officer. Among other things, the Committee noted that the total shareholder return of the Company measured over the nine- year period since Mr. Leonard's appointment as CEO of the Company in January 1999 exceeded all of our industry peer group companies as well as all other U.S. utility companies. In assessing individual and management performance overall (with respect to stock option grants and overall compensation), the Committee noted the following significant achievements: • Our delivery of total shareholder return of 32.5 percent relative to the 19 percent returned by the Philadelphia Utility Index; • Our completion of the acquisition of the 798-megawatt Palisades nuclear power plant; • Our success in implementing the alignment of our nuclear fleet which will produce operational improvements and ongoing cost savings; • Our receipt of authorization for $200 million of community development block grants with $181 million received in 2007; • Our successful securitization of $377 million of storm costs in Texas and $48 million in Mississippi related to Hurricanes Katrina and Rita; • Our receipt of a stipulation approving recovery of $971 million in storm costs and reserves in Louisiana; • Our receipt of $99 million in insurance proceeds associated with Hurricanes Katrina and Rita; • The emergence of Entergy New Orleans from bankruptcy in May 2007; • Our completion of the jurisdictional split of Entergy Gulf States into Entergy Gulf States Louisiana and Entergy Texas; • Our settlement of the New York Power Authority value sharing agreement; • Our continued management of commodity exposure through active contracting; • Our initiation of the separation of our non-utility nuclear business; • Our initiation of a new $1.5 billion share repurchase program; • Our being named for the sixth consecutive year to the Dow Jones Sustainability Index – World, an index that tracks the performance of companies that lead their field in terms of corporate sustainability on a global basis. This year we were the only company in the U.S. utility sector to be so honored; • Our being named as one of the 10 Best Corporate Citizens by Corporate Responsibility Officer magazine; • Our selection as part of the Climate Disclosure Leadership Index for the fourth consecutive time; • Our rating by Institutional Shareholder Services as the top utility for corporate governance; and • Recognition we received for our community relations, fundraising, nuclear practices, innovation, trustworthiness, customer service, corporate communications and emergency assistance. 23
  24. 24. For additional information regarding stock options awarded in 2007 to each of the Named Executive Officers, see the 2007 Grants of Plan-Based Awards table on page 33 of this Proxy Statement. Under our equity ownership plans, all options must have an exercise price equal to the closing fair market value of Company common stock on the date of grant. In addition, we have adopted a policy requiring that, if an executive officer (including a Named Executive Officer) exercises any stock option granted on or after January 1, 2003, the officer must retain at least 75% of the after-tax net profit from such stock option exercise in the form of Company common stock until the earlier of 60 months from the date on which the option is exercised or the termination of the executive officer's full-time employment. We have not adopted a formal policy regarding the granting of options at times when the Company is in possession of material non-public information. However, we generally grant options to Named Executive Officers only during the month of January in connection with our annual executive compensation decisions. On occasion, we may grant options to newly hired employees or existing employees for retention or other limited purposes. x Restricted Units Restricted units granted under our equity ownership plans represent phantom shares of Company common stock (i.e., non-stock interests that have an economic value equivalent to a share of our common stock). We occasionally grant restricted units to Named Executive Officers for retention purposes or to offset forfeited compensation from a previous employer or to existing employees for retention or other limited purposes. If all conditions of the grant are satisfied, restrictions on the restricted units lift at the end of the restricted period, and a cash equivalent value of the restricted units is paid. The settlement price is equal to the number of restricted units multiplied by the closing price of Company common stock on the date restrictions lift. Restricted units are not entitled to dividends or voting rights. Restricted units are generally time-based awards for which restrictions lift, subject to continued employment, over a two- to five-year period. In January 2008, the Committee granted Mr. Denault, our Chief Financial Officer, 24,000 restricted units. The Committee determined that, in light of the numerous strategic challenges facing the Company (including the challenges associated with the completion of the Company’s pending separation of its non-utility nuclear business) it was essential that the Company retain Mr. Denault’s continued services as an executive officer of the Company. The Committee also took into account the competitive market for chief financial officers and Mr. Denault’s broader role in the leadership of the Company. In determining the size of the grant, the Committee consulted its independent consultant to confirm that the grant was consistent with market practices. The Committee chose restricted units over other retention instruments because it believes that it better aligns the interest of the officer with our shareholders in terms of growing shareholder value and increasing shareholder returns on equity. The Committee also noted, based on the advice of its independent consultant, that such grants are a commonly used market technique for retention purposes. The restricted units will vest or mature on the following dates: Restricted Stock Units Vesting Date January 25, 2011 8,000 January 25, 2012 8,000 January 25, 2013 8,000 On each vesting date, we will pay, to Mr. Denault, subject to payment of withholding taxes, a cash amount equal to the closing price of a share of our common stock on that date. Under certain conditions, including a change of control of our company, death or disability, Mr. Denault’s restricted stock units may vest on an earlier date. No Named Executive Officers received restricted units during 2007. 24
  25. 25. Benefits, Perquisites, Agreements and Post-Termination Plans x Pension Plan, Pension Equalization Plan and System Executive Retirement Plan The Named Executive Officers participate in a Company-sponsored pension plan that covers a broad group of employees. This pension plan is a funded, tax-qualified, noncontributory defined benefit pension plan. Benefits under the pension plan are based upon an employee's years of service with the Company and the employee's average monthly rate of earnings (which generally includes salary and eligible bonus, other than Annual Incentive Plan bonus) for the highest consecutive 60 months during the 120 months preceding termination of employment or “Eligible Earnings,” and are payable monthly after separation from the Company. The amount of annual earnings that may be considered in calculating benefits under the pension plan is limited by federal law. Benefits under the pension plan are calculated as an annuity equal to 1.5% of a participant's Eligible Earnings multiplied by years of service. Years of service under the pension plan formula cannot exceed 40. Contributions to the pension plan are made entirely by the Company and are paid into a trust fund from which the benefits of participants will be paid. The Company sponsors a Pension Equalization Plan, which is available to a select group of management and highly compensated employees, including the Named Executive Officers (other than our Chief Executive Officer). The Pension Equalization Plan is a non-qualified unfunded plan that provides out of Entergy's general assets an amount substantially equal to the difference between the amount that would have been payable under the pension plan, but for legislation limiting pension benefits and earnings that may be considered in calculating pension benefits, and the amount actually payable under the pension plan. The Pension Equalization Plan also takes into account as earnings any Annual Incentive Plan bonus awards. The Company also sponsors a System Executive Retirement Plan available to the Company's approximately 60 officers, including the Named Executive Officers (other than our Chief Executive Officer). Participation in the System Executive Retirement Plan requires individual approval by the plan administrator. The System Executive Retirement Plan is designed to offer a replacement income ratio in the range (based on management level and total years of service) of 55% to 65% of a Named Executive Officer's final three-year average annual compensation (i.e., generally one-third of the sum of the participant's base salary and Annual Incentive Plan bonus for the three years during the last 10 years preceding termination of employment in which such sum is the highest). The System Executive Retirement Plan recognizes a maximum of 30 years of service for purposes of calculating a participant's benefit. Amounts payable under the System Executive Retirement Plan benefit are offset by the value of the Pension Plan and Pension Equalization Plan benefits, and are also typically offset by any prior employer pension benefit available to the executive. While the System Executive Retirement Plan has a replacement ratio schedule from one year of service to the maximum of 30 years of service, the table below offers a sample ratio at 20 and 30 years of service. Years of Chief Executives at Management Level 3 & above – Executives at Service Executive includes the remaining 4 Named Executive Officers Management Officer Level 4 20 Years 55.0% 50.0% 45.0% 30 years 65.0% 60.0% 55.0% Mr. Leonard's retention agreement (as further discussed below) provides that, in lieu of his participation in the Pension Equalization Plan and the System Executive Retirement Plan, upon the termination of his employment (unless such termination is for Cause, as defined in the agreement), he will be entitled to receive a benefit equal to 60% of his final three-year average compensation (as described in the description of the System Executive Retirement Plan above) calculated as a single life annuity and available in a lump sum. This benefit will be reduced by other benefits to which he is entitled from the Company-sponsored pension plan or prior employer plans. The terms of Mr. Leonard’s Supplemental Executive Retirement Plan were negotiated at the time of his employment with the Company and were designed to, among other things, offset the loss of benefits resulting from Mr. 25
  26. 26. Leonard’s resignation from his prior employer. At the time that the Company recruited Mr. Leonard, he had accumulated twenty-five years of seniority with his prior employer and had served as an executive officer for that employer for over ten years and in an officer-level capacity for over fifteen years. The Committee believes that the Pension Plan, Pension Equalization Plan and System Executive Retirement Plan are an important part of our Named Executive Officers' compensation program. These plans are important in the recruitment of top talent in the competitive market, as these types of supplemental plans are typically found in companies of similar size to the Company. These plans serve a critically important role in the retention of our senior executives, as benefits from these plans increase for each year that these executives remain employed by us. The plans thereby encourage our most senior executives to remain employed by us and continue their work on behalf of our shareholders. We have agreed to provide service credit to all of our Named Executive Officers (other than Mr. Leonard and Mr. Savoff, our Executive Vice President, Operations) under either the Pension Equalization Plan or the Supplemental Executive Retirement Plan. We typically offer these service credit benefits as one element of the total compensation package offered to new mid-level or senior executives that we recruit from other companies. By offering these executives quot;credited service,quot; we are able to compete more effectively to hire these employees by mitigating the potential loss of their pension benefits resulting from accepting employment with our Company. See the Pension Benefits table on page 36 of this Proxy Statement for additional information regarding the operation of the plans described under this caption. x Savings Plan The Named Executive Officers are eligible to participate in a Company-sponsored Savings Plan that covers a broad group of employees. This is a tax-qualified retirement savings plan, wherein total combined before-tax and after- tax contributions may not exceed 30 percent of a participant's base salary up to certain contribution limits defined by law. In addition, under the Savings Plan, the participant's employer matches an amount equal to seventy cents for each dollar contributed by participating employees, including the Named Executive Officers, on the first six percent of their earnings for that pay period. We maintain the Savings Plan for our employees, including our Named Executive Officers, because we wish to encourage our employees to save some percentage of their cash compensation for their eventual retirement. The Savings Plan permits employees to make such savings in a manner that is relatively tax efficient. This type of savings plan is also a critical element in attracting and retaining talent in a competitive market. x Health & Welfare Benefits The Named Executive Officers are eligible to participate in a group of health and welfare benefits available to a broad group of employees. These benefits include medical, dental and vision coverage, life and accidental death & dismemberment insurance and long-term disability insurance. Eligibility, coverage levels, potential employee contributions and other plan design features are the same for the Named Executive Officers as for the broad employee population. x Executive Long-Term Disability Program All of our executive officers, including the Named Executive Officers, are eligible to participate in our Executive Long-Term Disability program. Individuals who elect to participate in this plan will receive upon the occurrence of a long-term disability 65 percent of the difference between their base salary and the approximate $275,000 cap on disability payments under the Company’s general long-term disability plan. 26
  27. 27. x Executive Deferred Compensation The Named Executive Officers are eligible to defer up to 100% of the following payments into the Company- sponsored Executive Deferred Compensation Plan: x Base Salary (less deductions and withholdings) x Annual Incentive Plan Bonus x Performance Unit Program Awards The Named Executive Officers also are eligible to defer up to 100% of the following payments into our 2007 Equity Ownership Plan: x Annual Incentive Plan Bonus x Performance Unit Program Awards Additionally, Named Executive Officers may also have deferred account balances under a frozen defined contribution restoration plan. Amounts deferred under the Executive Deferred Compensation Plan and 2007 Equity Ownership Plan are subject to limitations prescribed by law and the respective plan All deferral amounts represent an unfunded liability of the employer. Amounts deferred into the 2007 Equity Ownership Plan are deemed invested in phantom shares of our common stock. Amounts deferred under the Executive Deferred Compensation Plan are deemed invested in one or more of the investment options (generally mutual funds) offered under the Savings Plan. Within the Executive Deferred Compensation Plan, the Named Executive Officer may move funds from one deemed investment option to another. Except for deferrals not subject to Internal Revenue Code Section 409A, the Named Executive Officer does not have the ability to withdraw funds, except within the terms provided in such officer's deferral election. The Company does not quot;matchquot; amounts that are deferred by employees pursuant to the Executive Deferred Compensation Plan or 2007 Equity Ownership Plan. With the exception of allowing for the deferral of federal and state taxes, the Company provides no additional benefit to the Named Executive Officer for deferring any of the above payments. Any increase in value of the deferred amounts results solely from the increase in value of the investment option selected (Company stock or mutual fund). Deferred amounts are credited with earnings or losses based on the rate of return of deemed investment options or Company common stock, as selected by the participants. We provide this benefit because the Committee believes it is standard market practice to permit officers to defer the cash portion of their compensation. The Executive Deferred Compensation Plan and 2007 Equity Ownership Plan permit them to do this while also receiving gains or losses on deemed investments, as described above. We believe that provision of this benefit is important as a retention and recruitment tool as many, if not all, of the companies with which we compete for executive talent provide a similar arrangement to their senior employees. x Perquisites We provide our Named Executive Officers with certain perquisites and other personal benefits as part of providing a competitive executive compensation program and for employee retention. However, perquisites are not a material part of our compensation program. In 2007, we offered to our Named Executive Officers limited benefits such as the following: corporate aircraft usage, personal financial counseling, club dues and annual mandatory physical exams. For security and business convenience reasons, we permit the Chief Executive Officer to use our corporate aircraft at Company expense for personal use. Our other Named Executive Officers may use corporate aircraft for personal travel subject to the approval of our Chief Executive Officer. The Personnel Committee reviews all perquisites, including the use of corporate aircraft, on an annual basis. For additional information regarding perquisites, see the quot;All Other Compensationquot; column in the Summary Compensation table on page 31 of this Proxy Statement. 27

×